UK mortgage approvals fell for a third month. Will October's figure fall again?

What happened

Net mortgage approvals for buying a home fell to 53,400 in September, from 54,800 in August, below an average of around 58,800 over the previous six months.

Lenders approved 53,400 loans to buy a home in September. The Bank of England said on 29 October that this was down from 54,800 in August and below the average of about 58,800 in the six months before. It was the third fall in a row, from 57,985 in June, and the lowest figure since December 2023. Approvals to move a mortgage to another lender rose to 42,600, from 34,000.

The average interest paid on new mortgages rose to 4.63% in September, from 4.60%. On 5 October the average five-year fixed mortgage reached 6.00%, according to Moneyfacts, the first time in three years, and it was 5.99% on 29 October.

The Bank of England kept its interest rate at 3.75% in September, but three of its nine members voted for 4%. The Guardian reports that a rise to 4% on 5 November is widely expected, after inflation reached 3.5% in September. The Bank publishes October’s approvals on 30 November. October ended before the vote, so the figure will show how buyers acted while the rise was only expected.

Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, decreased to 53,400 in September, from 54,800 in August.

Bank of England, Money and Credit, September 2026

Sources: Bank of England (2, 3, 4), The Guardian (2, 3)

The Pattern

We looked for cases where Bank of England figures showed home loan approvals falling two or more months in a row, to below the six-month average, while the rate stayed the same and some Bank members voted for a rise. In 1994 there was no such vote, but the Bank said markets expected a rise. We found 15 such months since 1993 and took the ten most recent, from 2010 to 2026.

The Read

Seven of the ten months were followed by another fall, and borrowing got dearer faster this autumn than in those years. In the 2017 and 2026 months the average rate on new mortgages rose by 0.02 to 0.15 points. This October the average five-year fixed deal reached 6%. Nationwide’s chief economist Robert Gardner said “Surveyors report that new buyer inquiries remain weak”. Lenders, asked by the Bank before mortgage rates jumped, expected demand for home loans to increase slightly from September to November.

All ten months come from the same Bank of England figures, and four of them from one run of falls in 2014, so there are reasons for doubt. In 2010 and 2014 the rate stayed at 0.5% for years and the votes for a rise never won, while now a rise is expected on 5 November. Low points often lasted: in five of nine months approvals stayed below that month’s level for the next two months. All five came in those two runs, in 2010 and 2014. Both runs that reached a fifth fall ended with a rise; October would be the fourth. The Bank also changes past months, so the October market compares October with September as both appear on 30 November.

Sources: Bank of England (2, 3, 4), The Guardian (2, 3)